How India’s crude oil import basket has undergone change over years, Pg10

Key Highlights:

• Historically, over 70% of India's crude oil was sourced from West Asian countries like Saudi Arabia, Iraq, Iran, Kuwait, and the UAE.
• India broadened its supply base to include African nations (Nigeria, Angola) and South American producers (Venezuela).
• Russia’s share in India’s import basket skyrocketed from less than 2% in 2021-22 to approximately 36% in 2024-25, making it the single largest supplier.
• The primary driver for the recent shift toward Russian oil has been the availability of significant discounts following Western sanctions on Moscow due to the conflict in Ukraine.

Detailed Insights:

• India has a history of adjusting its basket due to global sanctions. In 2010, UN sanctions on Iran forced India to drastically cut purchases, with Iran's share dropping to 6.2% by 2015-16. 
• Since February 2022, the global oil market has been bifurcated by sanctions against Russia. While Western nations pivoted away, India (the world's third-largest oil consumer) utilized its strategic autonomy to purchase discounted Russian Urals.
• Indian refineries are "well-suited" for Russian crude, which is generally a medium-sour grade. The technical ability of Indian refiners to process various grades of crude allows the country to switch suppliers based on price and availability.
• The evolution shows a move from a "security-first" approach (relying on traditional partners) to a "value-driven" approach, where New Delhi prioritizes the best economic deal to manage domestic inflation and fuel prices.

Key Concepts Involved:

• Crude Oil Basket: The mix of different types of crude oil that a country imports from various international suppliers.
• Energy Security: The association between national security and the availability of natural resources for energy consumption.
• Urals Grade: The reference oil brand used as a basis for pricing Russian export oil mixture.